NEW DELHI: Markets regulator Sebi has proposed raising the minimum order size for block deals on stock exchanges to Rs 25 crore from Rs 10 crore. A block deal is a single large share transaction executed between a buyer and a seller during a 15-minute window offered twice a day. The existing Rs 10 crore threshold has been in place since 2017. The move aims to reduce manipulation in large trades and enhance market transparency.According to a PTI report, in its consultation paper, Sebi said, “The minimum order size for execution of trades in the block deal windows shall be Rs 25 crore. Every trade executed in the block deal windows must result in delivery and shall not be squared off or reversed.”Alongside the higher order size, Sebi is reviewing the pricing mechanism for block deals. The regulator is considering widening the price band to up to 3% for non-derivative stocks, while retaining the existing 1% band for futures and options (F&O) scrips. Currently, trades are allowed within 1% of the previous day’s closing price. Sebi noted the change is expected to reduce the risk of market manipulation.
Trading hours and transparency measures
The consultation paper outlines the operating hours of block deal windows. The morning session runs from 8:45 am to 9 am, with trades executed at the previous day’s closing price. The afternoon session, from 2.05 pm to 2.20 pm, will use the volume weighted average price (VWAP) of trades executed in the cash segment between 1.30 pm and 2 pm as the reference price.“These windows are designed to provide buyers and sellers a platform to execute large share transactions that are usually negotiated in advance,” Sebi said. To further enhance transparency, exchanges will publish trade details including the scrip name, client name, quantity of shares, and traded price on the same day after market hours.
Public consultation open till September 15
Sebi has invited public comments on the proposed changes until September 15, allowing stakeholders to provide feedback before finalising the rules.The proposed changes are expected to make large share trades more transparent and reduce the risk of price manipulation, benefiting investors and the broader market ecosystem.
